87 SUSTAINABILITY STATEMENT Integrated Annual Report 2025 SUSTAINABILITY STATEMENT Risk Assessment Risk Management The REIT employs a structured risk assessment approach integrated into daily operations alongside other risks via its ERM Framework. Key risks are assessed based on their likelihood of occurrence and potential impact on the business, particularly in the event of adverse climate-related incidents. An Audit and Risk Management Committee has been established to review and update risks on a quarterly basis, with input from each department. To manage identified risks, the REIT has implemented the following measures: • Enterprise Risk Management Framework: The ERMC continuously monitors, evaluates and manages significant risks. Corrective actions are implemented as necessary, and their effectiveness is regularly reviewed. • Internal Controls: The REIT implements action plans with specific timeframes for mitigation when necessary. • Internal and External Audits: The BARC regularly examines the internal control process and the results of the risk management. Risk Management Description Risk Identification ESG Pillar Risk Area • Climate & Transition Risk • Energy Inefficiency • Poor Environmental Due Diligence Environmental • Tenant Health & Wellbeing • Community Relations • Workforce Diversity & Inclusion • Health & Safety Compliance • Breach of Human Rights/Child Labour Social • ESG Governance Weakness • Inadequate ESG Reporting • Conflict of Interest/Recurrent Related Party Transactions (“RRPT”) • Greenwashing • Data Privacy & Cybersecurity • Corruption & Bribery Risk • Fit and Proper Risk Governance The table below summarises the principal ESG risk areas relevant to Al-`Aqar. RISK MANAGEMENT (CONT’D) RISK PRIORITISATION Identified ESG risks are prioritised based on likelihood and impact. Highpriority risks are escalated to the BARC and monitored on a quarterly basis. The approach to climate risk management ensures that climate risk remains a central concern in the REIT’s operations, and its integration into the ERM and linkage with KPIs further enforces resilience and transparency on climate-related concerns. By developing robust climate risk management, the REIT enhances its climate resilience and provides customers and stakeholders with the safest and most resilient properties.
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